How’s this for an unpopular opinion? The needs and desires of people who are starting out in homeownership have changed, and frankly, the industry needs to catch up in a couple of important ways.
First of all, while much of the demand for new housing is at the affordable end right now, developers and builders have not focused their attention there. Now, there are many understandable reasons for this: Creating new housing has become more expensive over the past few decades, with costs for land, labor, materials and regulatory compliance continually rising. By building luxury homes, the industry is much better able to cover these costs. And, to paraphrase one of the sources in our cover story, what’s the incentive to build a house for $250,000 when people looking to buy in the area will gladly pay $500,000 for it?
But demographics matter as much as market forces. The shapes and needs of families have changed. Fewer millennials are having children, and those who do are having them much later in life than their parents did. Should they be relegated to apartment living just because they don’t need a standard 3-bedroom home with a rec room for the children? Meanwhile, boomerang kids and aging grandparents are increasingly moving in with the so-called sandwich generation, putting flexible living arrangements at a premium.
As the COVID-19 pandemic forces us to reevaluate what’s most important, you can bet many will be looking for an affordable way to carve out their own private space through homeownership. What gives me hope that our readers will be able to serve these people is that Chicago once intentionally created housing that would meet the demands of its burgeoning middle class with two-flats, bungalows and other structures that were woven seamlessly into the fabric of our residential real estate market. And we can do so again. In fact, if we want to maintain our status as one of the more affordable big cities in the U.S., we’re going to have to make it a priority, and quickly.
Thankfully, there are some smart people figuring out how to do this, and we’ve embedded their thoughts and innovations into this issue. And if you have ideas to share, I hope you’ll reach out to me at email@example.com.